1 eFX Daily colour

1.1 FX Spot

1.1.1 Overview

(Feb-27) Nvidia Corp. has faced challenges, warning of tighter profit margins due to the rapid rollout of its new Blackwell chip and potential US tariffs. This comes at a shaky time for the AI industry, with Nvidia shares dipping amid concerns over reduced spending by data center operators and competition from Chinese startup DeepSeek. Meanwhile, Bitcoin has risen to $86,000 after falling to a low of $82,167, oil prices steadied, and gold prices fell.

  • Gold trades at $2894.79 per ounce, and was relatively unchanged yesterday.
  • Oil trades at $72.71 per barrel, and was down 0.86% yesterday.

The USDZAR remained paid overnight. The RSI indicator points to an overbought currency, thus a reversal back to that 18.35 is likely.

Against the crosses:

  • EURZAR trades at 19.2980.
  • GBPZAR trades at 23.3316.

Key events today:

  • SA PPI, 11h30 SAST
  • Eurozone consumer confidence, 12h00 SAST
  • US GDP, durable goods, initial jobless claims, 15h30 SAST

1.1.2 US

(Feb-19) President Donald Trump announced plans to impose 25% tariffs on automobile, semiconductor, and pharmaceutical imports, with an announcement expected by April 2. He aims to give companies time to establish US-based operations to avoid tariffs. These new levies could significantly impact industries and lead to higher consumer prices, particularly affecting countries like Mexico, South Korea, Malaysia, and Singapore.

(Feb-24) The Trump administration has taken several actions against China, increasing the risk of worsening ties. President Trump issued a memorandum to curb Chinese investment in strategic American sectors and urged Mexico to levy Chinese imports. The US also proposed fees on Chinese-made commercial ships. These moves led to a drop in Chinese shipping stocks and fluctuations in the CSI 300 Index, while the yuan rose 0.2% against the dollar, now trading at 7.2435.

(Feb-27) President Trump has proposed a 25% tariff on EU imports. The specifics, including which products and sectors will be affected, are still under consideration. No final decisions have been made yet.

1.1.3 SA

(Feb-24) The Rand remained stable at 18.32 against the $ after a volatile week, initially weakening due to the national budget postponement but recovering with rising global gold prices. The budget delay, caused by disagreements over a proposed VAT increase, is unprecedented and creates uncertainty ahead of the mid-March presentation. Markets are watching for debt consolidation and expenditure cuts in the revised budget.

Over the weekend, we saw a return of load-shedding to stage 6 but Eskom has announced a reduction to stage 4, effective from 00h30 on Monday, February 24th. This decision follows the successful return of most downed units, which has improved the power supply situation.

On the positive side: SA may be eligible to exit the FATF gray list in October, having addressed 20 of 22 items required for delisting. The National Treasury confirmed significant progress in improving the country’s financial security systems, with only two items remaining to be addressed. This progress has been acknowledged by the FATF, which will consider SA’s delisting in its upcoming October review.

1.1.3.1 eFX Volumes

  • Overall volumes

(Feb-19) Saw volumes picking to their highs at the back of the postponement of the budget speech.

(Feb-24) volumes fluctuated around the recent ADV last week, with an uptick on Wed (19-Feb) after budget was postponed to 12 March.

  • Price to volumes

(Feb-21) Rand looks set to trade 18.30 with the latest implied support at 18.05 and before that it was 18.25.

(Feb-24) Clients are happy to be short USDZAR below 18.50, otherwise they are long all the way to 18.85.

  • Liquidity hours across currency pairs
  • Currency positions

(Feb-20) Growing optimism on ZAR, in-fact both importer and exporters happy to trade at these lvls. Both dealing in big tickets.

(Feb-24) Rand opens slightly under pressure today.

(Feb-27) Clients remain net short usdzar. EUR and GBP is favored to USD.

1.1.3.2 USDZAR levels

(Feb-24) Clients are happy to be short USDZAR below 18.50, otherwise they are long all the way to 18.85.

  • ZAR facing negative sentiments after load-sheeding announcement
  • ZAR facing positive sentiments since may be eligible to exit the FATF gray list in October.
  • ZAR volume weighted price has reduced to 18.35.
  • Range for today 18.50 - 18.25. Thus, we remain rand positive.

(Feb-25) All eyes on SA CPI tomorrow. Expecting a relatively quiet day, range still at 18.50 - 18.25.

(Feb-26) SA inflation came inline with expectation with Core CPI MoM at 0.2%. Rand looks stuck at the 18.50 - 18.30 range.

  • We remain ZAR positive, with a range of 18.50 - 18.25 as before.

(Feb-27) Fairly unchanged views on the ZAR, we are still range trading.

1.1.3.3 USDZAR spreads

(Feb-20) The ZAR seems to now be benefit fitting from a weaker $ environment which is also coupled with Gold hitting all time highs and the confirmation by the President that there won’t we a fallout in the GNU following the budget issue.

(Feb-24) Rand held the 18.35 VWAP lvl and the 18.50 - 18.25 range. Importers are happy to trade at these lvls while exporters are staying on the side-lines.

(Feb-25) SA CPI tomorrow is expected to be a catalyst for the next ZAR move, for now, we have mainly traded at that 18.35.

(Feb-26) Thin market, spreads remained wide for the duration of the day.

1.1.4 Key events this week:

  • SA PPI, Thursday
  • Eurozone consumer confidence, Thursday
  • US GDP, durable goods, initial jobless claims, Thursday
  • Germany CPI, unemployment, Friday
  • India GDP, Friday
  • Japan Tokyo CPI, industrial production, retail sales, Friday
  • US PCE inflation, income and spending, Friday
  • Chicago Fed President Austan Goolsbee speaks, Friday

1.2 FX Volatility Update

1.2.1 Update

By Thuto Mukena - Institutional Sales Specialist (Feb-27)

  • Overview

The general momentum in local implied vols remains a broad move lower as the market navigates this week’s risk events. Headline risks remain unchanged, with tariffs and peace talks continuing to drive sentiment. Yesterday, Trump confirmed that tariffs on Canada and Mexico will now take effect in April, pushing the timeline further from the initially planned March deadline.

The uncertainty surrounding this has kept the dollar supported across most pairs. On the local front, the ZAR extended its losing streak to three sessions, closing weaker at R18.3883/$. Now that CPI is behind us, printing in line at 3.2%, the local implied vol market showed little reaction. The 1-week implied vol tenor dropped by 0.85 vol pp from open, as market participants look past the event.

  • G10 & EM

US GDP takes centre stage today, with consensus at 2.3% y/y, unchanged from the previous print. Both developed markets and EM Implied vols continue to adjust lower, reflecting tempered vol expectations. The postponement of US tariffs on Mexico and Canada triggered a sharp adjustment lower in their vol curves. USD/CAD and USD/MXN 1-week implied vol dropped by 223bps and 262bps from open, respectively. This was a broader theme on the day observed across most pairs.

1.3 Africa

1.3.1 Update

By sizwe Mfayela - Institutional Sales Specialist (Feb-27)

  • Angola

    • Angola is set to issue up to $4bio of external debt to finance its 2025 fiscal year budget. The nation is seeking to diversify its funding sources by seeking cheaper financing with longer maturities as it plans to issue up to $1bio of debt securities in the Japanese market alongside a $3bio issuance of Eurobonds.

  • Kenya

    • Kenya issued $1.5bio worth of 11-year Eurobonds to lengthen its external debt maturity profile as part of a debt swap due to the buying back of $900mio worth of the 2027 notes. The 11-year bonds were issued at a price of 97.195 (yield 9.95%). The country’s next large debt maturity is the Kenint 28s, with $1bio due in Feb 2028.

  • Mauritius

    • Mauritius has shut down it’s airport as a Class 3 cyclone warning was raised by the country’s meteorological services. The banks and stock exchange will remain closed following yesterday’s public holiday.

  • Nigeria

    • Nigeria’s FX reserves shrunk by $2.2bio from the January 6 highs of $40.92bio.

  • Zimbabwe

    • ZiG Feb MoM inflation cooled to 0.5% vs 10.5% in Dec

  • Eurobonds: +0.125-1.00pts (KENINT outperformance)

    • ANGOL was generally bid, particularly in the front-end bonds. Headline out earlier, – Ver Angola: Angola to issue debt of up to four billion dollars to finance state budget – from which there were lots of questions in relation to. The market shrugged off the headline. Trading needs to get more clarification on “cheapest” and “with a grace period”
    • KENINT flows were light and skewed to buyers of risk, even with the issuance backdrop. Locals, HF and ETF were looking to add while there were small pockets of sellers from RM. New KENINT 36s printed @ 9.95% ytm, with $1.5bln issued.
    • SENEGL finally seeing the curve trade with the market beta but seeing continued selling into strength on the 28s.
    • SOAF had another active session across the curve, trading just shy of $50mm mostly with locals selling front-end. Month-end flows giving a bid to SOAF, with buyers of risk from all client sets in general. The curve closed up 0.25-0.875pts higher (4-8bps tighter, 4bps steeper)

1.3.2 Economic data

Economic data releases